We have isolated a novel secreted molecule, Wise, by a functional screen for activities that alter the anteroposterior character of neuralised Xenopus animal caps. Wise encodes a secreted protein capable of inducing posterior neural markers at a distance. Phenotypes arising from ectopic expression or depletion of Wise resemble those obtained when Wnt signalling is altered. In animal cap assays, posterior neural markers can be induced by Wnt family members, and induction of these markers by Wise requires components of the canonical Wnt pathway. This indicates that in this context Wise activates the Wnt signalling cascade by mimicking some of the effects of Wnt ligands. Activation of the pathway was further confirmed by nuclear accumulation of β-catenin driven by Wise. By contrast, in an assay for secondary axis induction, extracellularly Wise antagonises the axis-inducing ability of Wnt8. Thus, Wise can activate or inhibit Wnt signalling in a context-dependent manner. The Wise protein physically interacts with the Wnt co-receptor,lipoprotein receptor-related protein 6 (LRP6), and is able to compete with Wnt8 for binding to LRP6. These activities of Wise provide a new mechanism for integrating inputs through the Wnt coreceptor complex to modulate the balance of Wnt signalling.